North Dakota Leads in Job Creation for Fifth Straight Year

Rhode Island replaced Maine in 2013 as state with lowest Job Creation Index

PRINCETON, NJ — For the fifth consecutive year, North Dakota topped all other states in employee perceptions of job creation at their workplaces in 2013, as measured by the Gallup Job Creation Index. North Dakota’s +40 index score easily surpasses the District of Columbia’s and South Dakota’s second-place +30 scores. Rhode Island workers saw the least job creation, with a +12 score.

Gallup’s Job Creation Index is a measure of net hiring, determined by asking full- and part-time U.S. workers, aged 18 and older, whether their employer is hiring new people and expanding the size of its workforce, not changing the size of its workforce, or letting people go and reducing the size of its workforce. The index score is the difference between reported “hiring” and “letting go.” Full results by state can be found on page 2.

North Dakota has ranked No. 1 among U.S. states for job creation in each of the last five years, and it has appeared in Gallup’s top 10 in all six years since the inception of the Gallup Job Creation Index in 2008.

Two states have enjoyed a five-year run in the top tier: Nebraska and Texas. South Dakota, Iowa, and the District of Columbia have been in the top group each of the past four years, since 2010. Minnesota first appeared in the group in 2012, while five other states — Delaware, Michigan, Arizona, Wisconsin, and Hawaii — are making their first appearance.

Two states — Rhode Island and Connecticut — have the unwanted distinction of appearing in the bottom tier for job creation every year since 2008. New York has been in the low-ranking group each of the past four years, New Mexico each of the past three years, and West Virginia for the past two years. Vermont, New Hampshire, Maine, and North Carolina have made occasional appearances, while 2013 was the first year for Kentucky, Alabama, and Arkansas.

Nationally, net hiring increased slightly in 2013, with the Job Creation Index averaging +20 during the year, up from +18 in 2012. The index was relatively stable in most states, but rose by significantly more than the average in a handful — most notably Delaware (up 15 points to +29), Florida (up seven points to +22), and California (up seven points to +21).

Job Creation Index Linked With Standard of Living Perceptions

Three of the five states with the longest track records at the top of the state job creation ranking — North Dakota, South Dakota, and Nebraska — are strongly Republican in party affiliation. All three states with a long track record (at least four years) at the bottom — Rhode Island, Connecticut, and New York — are heavily Democratic. However, apart from this, there is little correspondence between net hiring and partisan affiliation in the states.

At the same time, there is a strong connection between employee reports of net hiring and Americans’ perceptions of their standard of living. States with higher Job Creation Index scores tend to have higher standard-of-living scores, and vice versa. There is a lesser, but still strong, relationship between the Job Creation Index and Americans’ confidence in the national economy, as measured by Gallup’s Economic Confidence Index.

Bottom Line

Nationally, reported job creation was fairly flat in 2013, with Gallup’s overall Job Creation Index inching up two points to +20. Within the states, the index varied in a 28-point range from +12 in Rhode Island to +40 in North Dakota. Many of the states in the highest and lowest tiers carried over from 2012; but there was also some shuffling. Most notably, net hiring in Delaware as reported by workers residing in that state rose sharply, enough to convert Delaware from one of the lowest-ranking states to one of the highest. Whether that represents a statistical anomaly or a sign of real improvement in the jobs picture in that state will become clear in 2014.

Along the same lines, from 2008 through 2011, West Virginia had been one of the highest-ranking states. It then dropped to one of the lowest in 2012, and remained there in 2013 — thus confirming the 2012 finding. How much of this is due to reported declines in coal production in that state is unclear, but it bears watching in 2014.

The good news about the Gallup Job Creation Index nationally is that it has recovered from the net-negative reading Gallup recorded in 2009, and since then nearly all states have shown substantial improvement.

Thus far in 2014, the index remains near +20. However, as was seen in 2013, even if that score persists, important state-level shifts could be happening.